Columbia Distributing CEO Chris Steffanci on the General Distributors Inc. Acquisition

Yesterday news broke that Columbia Distributing was purchasing Oregon City-based General Distributors Inc. (GDI) in a move that could have major ramifications for the industry and small independent breweries. The acquisition adds over 100 international, national, and local beer, energy and water suppliers from GDI into Columbia's network. Immediate concern was expressed online and in local watering holes for GDI staff's jobs and how well some of their breweries (Culmination Brewing, Flat Tail Brewing, Coalition Brewing, etc.) would do in the major book that Columbia already holds, where they would have to compete with craft giants like Stone Brewing, New Belgium, and Deschutes Brewery. A possible loss of tap handles during an already competitive time when many breweries sales are down could even lead to a few closures, as one brewery in the mix expressed concern for.Aaron Gardner, co-owner/founder of Point Blank Distributing--one of the few local independent distributors with weight--said, "it’s bad for the smaller craft brands that will be buried in the Columbia book. Columbia isn’t built for those types of brands." Another brewery owner with a GDI contract concurred, saying "the fear is getting lost in the shuffle," but also added, "I think there's opportunity there to be a feature Portland craft brand with a company that has a bigger footprint across the board."There have been many unanswered questions, like: Will breweries distributed by GDI have the option to jump ship rather than be distributed by Columbia? And, will GDI employees get to keep their jobs? Another concern is the diminishing number of options for craft breweries needing distribution. Self-distribution is difficult for many breweries and not necessarily in their skill set or resources to accomplish while mid-size distributor options (especially without ties to "big beer") are shrinking. In an attempt to get to the bottom of this, we got ahold of  Columbia Distributing's CEO Chris Steffanci for an interview.Q: What is your role at Columbia distributing and in the purchase of general distributors?Chris Steffanci: CEO. My role in Columbia is to set a clear vision and strategy to grow our business by providing our many brewers and suppliers a route to market so that we are meeting consumer needs across many categories and segments including beer, carbonated soft drinks, energy and other non-alcohol products. My role in the general acquisition was to ensure we worked out a deal that worked for the Fick family, GDI employees, Columbia, and our mutual suppliers and customers, taking into consideration the long legacy and positive impact they have had in the Portland community.Q: Why did you want to purchase GDI and when did conversations begin?CS: Wholesaler consolidation started many years ago in an effort to better serve both customers and suppliers and to survive in an ever changing and more competitive market. Columbia expressed interest in purchasing GDI many years ago knowing that they would only consider a sale when it was the right timing for them.Q: How much is GDI being purchased for?CS: Purchase price is confidential and cannot be disclosed as part of the agreement.Q: Do breweries in the General Distributing portfolio have a place in the Columbia distributing book?CS: Absolutely, as a matter of fact over 90% of the GDI portfolio volume is already Columbia distributing brewers and suppliers in the rest of Oregon, Washington, and Santa Rosa, CA. We also hope the other 10% of breweries to want to be distributed through Columbia.Q: What would you say to breweries concerned they are going to get lost in Columbia's book or not get the attention they deserve?CS: While we certainly are a large distributor volumetrically, we actually have the same or in some cases less total brands and SKUs than many other distributors in the Pac NW. We also leverage our scale and have complete retail coverage across our geography that provides really strong service levels and the ability to get a case or keg of beer across Oregon and Washington in 24 hours. We also have a fully developed chain team that really helps build brands across channels offering incredible choice and variety to customers and consumers. While Columbia may not be the right distributor for all brewers, we have a lot to offer most in our market.Q: Are breweries with General Distributing’s able to opt out of the agreement when Columbia takes ownership?CS: Yes, they can choose any distributor that meets their needs and Columbia has no intention of holding brewers wishing to move their business.Q: How does the purchase of GDI impact the Oregon beer landscape? Does this not make it more difficult for small breweries to reach the market?CS: We believe this will have no negative impact at all to the Oregon beer landscape. Oregon is a top craft beer market in the US with a really knowledgeable consumer base that appreciates local beer, quality and community. We will always be focused on providing consumers what they want and small breweries play an incredibly important role in delivering against this need. We believe in brand building and have a successful history of providing small breweries great access to all the markets we do business in.Q: What is changing at Columbia that you want to carry some of the small local brands that GDI has, or is this more about MillerCoors?CS: Nothing is changing as we have always carried large national and international brands as well as smaller local breweries. GDI and Columbia have both done a great job of building brands in Portland as competitors and we will now bring our portfolio together and continue to provide choice, availability and strong customer service. It is worth noting that at one time, Deschutes, Rogue, Pyramid and others were considered small local brands.Q: What is happening to the General Distributing staff and Oregon City facility?CS: We will be interviewing all general employees to fill roles that we have added and also openings we may have at Columbia in other markets. We will be selling the facility in Oregon City as we already have significant warehouse space to service the market.Q: Is there a role at Columbia for GDI higher-ups like their craft beer buyers or craft development reps?CS: Again, we will interview all employees at GDI and can always use beer and craft knowledgeable people to make us better at our business. It remains Columbia’s goal to have the best team in the beer industry.